Customer retention

Customer retention definition: Strategies + metrics to track

What is customer retention?

Customer retention is the process of delivering consistent value to your customer base to foster loyalty and drive repeat purchases. A good customer retention rate ensures that you don't need to aggressively invest in customer acquisition, allowing your business to grow sustainably.

Customer retention benefits

Here are some compelling reasons why customer retention rate deserves your attention:

  1. Smart spending - acquiring new customers costs you significantly more than nurturing the ones you already have
  2. Steady income - loyal customers are your steady source of revenue, even when market conditions are uncertain
  3. Word-of-mouth recommendations - happy customers become your best marketers, sharing positive experiences with peers who may also become your customers
  4. Valuable insights - long-term customer bases provide valuable feedback that can help you improve your products and services
  5. Upselling opportunities - with customer loyalty programs, existing customers trust you and are more open to exploring additional products or services you offer

Key customer retention metrics

You want to know if your retention efforts are paying off, right? Here are a few metrics that give you a clear picture:

  1. Customer churn rate - the percentage of customers who stop doing business with you, which is calculated by dividing the number of lost customers by your total customers in a specific time period
  2. Customer lifetime value (CLV) - predicts the total revenue a customer will generate throughout their engagement with your business
  3. Retention rate - the percentage of customers you keep, calculated by subtracting the number of new customers added in a specific time period from from total customers at the end of the period, then dividing by the total customers at the start

Tried-and-true strategies that keep your customer retention rate high

While every business is unique, some successful customer retention strategies have proven themselves over time:

  1. Quality customer service - provide quick, personalised and empathetic responses to customer needs
  2. Personalised onboarding - tailor the orientation process to users' individual needs, learning styles and software familiarity
  3. Regular check-ins - reach out to your customers regularly and use their feedback to improve your product
  4. Exclusive content - treat loyal customers to previews and early access
  5. Unexpected rewards - surprise your customers with generous discounts
  6. Community building - host competitions that encourage your customer base to interact with each other and your brand
  7. Loyalty programmes - offer discounts, special offers and freebies to repeat customers
  8. Value adding - regularly share content, updates and offers through email, social media or other channels

Customer retention examples

Trillion-dollar companies know a thing or two about customer retention.

Consider Amazon Prime, for example, which offers its members free shipping, exclusive deals and access to streaming. This keeps customers happy and loyal because they find real value in the membership.

Meanwhile, Apple's ecosystem of products and services makes it easy for customers to stick around because everything works seamlessly together, ensuring excellent customer retention efforts.

Customer retention tools

Customer retention is much easier to achieve when you have software to support you. Here are some platforms you could think about implementing:

  1. Customer relationship management (CRM) systems - tools like Salesforce and HubSpot organise customer info, track interactions and help you provide personalised experiences
  2. Email marketing platforms - the likes of Mailchimp and SendinBlue let you create targeted email campaigns that nurture customer relationships
  3. Social media management tools - Hootsuite and Buffer help you schedule and manage social media posts for consistent engagement


Customer retention isn't just about revenue; it's about building relationships that withstand the test of time.

By employing effective strategies, using the right tools and understanding the direct link between customer retention and ROI, you give yourself the best possible chance of growing sustainably.

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